Corn acreage likely to shrink in 2014

That may have a little to do with falling prices. Corn hit $8 a bushel in 2012 but skidded badly last year. The present price is closer to $4 a bushel.

"Farmers are taking a closer look at soybeans this year," said Patrick Kirchhofer, manager of the Peoria County Farm Bureau.

"Because corn has been more profitable in recent years, we've seen a gradual shift to more corn acres in Peoria County," he said.

Kirchhofer estimated that a breakdown of the largest crops grown in the country would show corn with about 120,000 acres to soybean's 80,000.

"Ten or 15 years ago, it was more like 105,000 acres of corn and 90,000 acres of soybeans (planted in Peoria County)," said Kirchhofer.

Several factors could enter into a farmer's decision to plant less corn in 2014. First of all, there was a big corn crop in 2013 — not just in Illinois — but across the nation where analysts have called it a record year, topping 14 billion bushels.

While U.S. farmers rebounded from a drought-stricken 2012, the positive crop resulted in lower prices.

Corn stockpiles have risen faster than at any time since 1994, noted a Bloomberg survey.

U.S. farmers aren't the only ones who have planted more corn in recent years. Corn & Soybean Digest added that high corn prices increased corn production around the world by 45 percent since 2005.

That not only means more competition for U.S. farmers who want to export grain but — due to excess production of the commodity — lowers the price.

But there's another issue in the Corn Belt: the production of ethanol, the corn-based fuel that uses up to 40 percent of the nation's corn crop, may have peaked. The U.S. Environmental Protection Agency recently proposed reducing the 2014 requirement of ethanol under the Renewable Fuel Standard by 10 percent — from 14.4 billion gallons to 13 billion gallons.

That proposal doesn't sit well with producers like Ross Pauli, a farmer in Edwards. "It's a case of bad timing. Now when we have excess corn and all these (ethanol) plants built, they want to cut back on production," he said.

"It's just going to hurt the farm economy," said Pauli if the EPA decision is approved.

As president of the Peoria County Corn/Soy Promoters, a group that will meet at Gil's Supper Club in Hanna City at 5:45 p.m. on Tuesday, Pauli said he plans to ask member farmers to register their own views with legislative representatives over the EPA proposal.

On his own 650 acres, Pauli said right now he's planning on pulling back a little on the amount of corn he'll plant this year. "I will still plant more corn than soybeans but the percentage will be 60 percent corn to 40 percent soybeans. Last year it was probably about 65 percent corn," he said.

While soybean prices have also dropped in recent years, the reduction hasn't approached the 40 percent decline that corn futures suffered in 2013.

But don't look for Illinois farmers to abandon corn in 2014, said University of Illinois economist Darrel Good. "I do expect some cutback of corn acres and I think we'll see a tick up in soybean acres but, at this point, I look for a fairly minor adjustment," he said.

Another big crop year also raises the possibility of a soybean stockpile. Recent reports noted that Brazil just planted almost 74 million acres of soybeans while Argentina has planted beans on 50 million acres.

Steve Tarter can be reached at 686-3260 or starter@pjstar.com. Follow his blog, Minding Business, on pjstar.com and follow him on Twitter @SteveTarter